---
title: "MIP (Mortgage Insurance Premium) — What It Means | Ondo RE"
canonical: https://www.ondorealestate.com/glossary/mip/
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# MIP (Mortgage Insurance Premium)

Also called: fha mortgage insurance, upfront mip, annual mip

The mortgage insurance charged on an FHA loan: an upfront premium plus an annual premium collected monthly.

MIP protects the FHA insurance fund, not the borrower. The upfront premium is commonly financed into the loan; the annual premium is divided across twelve payments.

MIP and conventional PMI end differently. PMI can generally be removed once the loan reaches the program’s equity threshold; on many FHA loans the annual premium stays for the life of the loan unless the borrower refinances out of FHA entirely.

## Why it matters

That difference in how the insurance ends is often the deciding factor between FHA and conventional, not the rate.

## Related terms

- [PMI (Private Mortgage Insurance)Insurance on a conventional loan that protects the lender when the borrower has less than the program’s required equity.](/glossary/pmi/)
- [FHA loanA government-insured mortgage designed to widen access to financing, with lower down payment and credit thresholds than most conventional loans.](/glossary/fha-loan/)
- [Conventional loanA mortgage not insured or guaranteed by a government program such as FHA, VA, or USDA.](/glossary/conventional-loan/)
- [RefinanceReplacing an existing mortgage with a new one to change the rate, the term, or both.](/glossary/refinance/)

## Go deeper

- [How mortgage insurance actually ends](/blog/mip-vs-pmi-how-mortgage-insurance-ends/)

## More in Mortgage & lending

- [Amortization](/glossary/amortization/)
- [APR (Annual Percentage Rate)](/glossary/apr/)
- [ARM (Adjustable-Rate Mortgage)](/glossary/arm/)
- [Cash-out refinance](/glossary/cash-out-refinance/)
- [Closing costs](/glossary/closing-costs/)
- [Conforming loan](/glossary/conforming-loan/)

## Have a question about your own situation?

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